A Chinese national has appeared in court in California following his extradition from the Netherlands over an alleged cryptocurrency scam. Prosecutors say the operation took more than $36.9 million from 174 victims across the United States.
Zhen Zhao, 44, faces a charge of conspiracy to commit money laundering. Authorities allege he helped move victims’ funds through an international network involving the United States, the Bahamas and Cambodia.
Cryptocurrency Scam Used Fake Investment Platforms
According to prosecutors, members of the operation approached potential victims through unsolicited text messages, phone calls, social media and dating services.
They allegedly built relationships before encouraging targets to invest in digital assets. This approach uses personal trust to make fraudulent financial opportunities appear credible.
The group also created websites that imitated legitimate cryptocurrency trading platforms, prosecutors said. These sites helped convince victims that their money would fund genuine investments.
However, authorities allege the perpetrators stole the funds instead. They also told victims that their investments had increased in value, reinforcing the deception.
Such schemes often involve prolonged contact rather than a single fraudulent message. The supposed investment opportunity follows efforts to establish confidence in the person promoting it.
Prosecutors Trace Funds Through the Bahamas
Investigators say victims transferred more than $36.9 million from US bank accounts to an account at Deltec Bank in the Bahamas. That account operated under the name Axis Digital Limited.
Prosecutors allege Zhao and other participants arranged for the bank to convert the money into Tether, also known as USDT. They then directed the cryptocurrency to a wallet under the control of participants in Cambodia.
From there, according to authorities, participants transferred the USDT to leaders of scam centres throughout the region.
The allegations describe how the cryptocurrency scam combined fake investment websites with cross-border money transfers. However, Zhao’s alleged role remains subject to the criminal proceedings.
Zhao Faces a Money Laundering Conspiracy Charge
Authorities charged Zhao in August 2025. Following his extradition from the Netherlands, he appeared for arraignment in California.
If convicted, he faces a maximum prison sentence of 20 years. That figure represents the statutory maximum, rather than a sentence the court has imposed.
Meanwhile, eight other participants in the same criminal operation have already pleaded guilty. Courts have sentenced two of them to 51 months and 46 months in prison.
Those guilty pleas concern the other defendants and do not establish Zhao’s guilt.
Reported Investment Fraud Losses Continue to Rise
The case comes amid growing reported losses from investment fraud in the United States.
According to the FBI’s 2025 Internet Crime Report, investment fraud complaints recorded more than $8.6 billion in losses last year. That compares with $6.5 billion in 2024.
The 2025 total came from 72,984 complaints. These figures cover reported investment fraud broadly, rather than this cryptocurrency scam alone.
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